XL Fleet Corp. (NYSE:XL): Are Analysts Optimistic?

With the business potentially at an important milestone, we thought we'd take a closer look at XL Fleet Corp.'s (NYSE:XL) future prospects. XL Fleet Corp. develops and deploys hybrid electric solutions for the commercial and municipal vehicle market in North America. The company’s loss has recently broadened since it announced a US$15m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$24m, moving it further away from breakeven. The most pressing concern for investors is XL Fleet's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for XL Fleet

XL Fleet is bordering on breakeven, according to the 2 American Auto Components analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$42m in 2023. The company is therefore projected to breakeven around 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 63% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of XL Fleet's upcoming projects, however, keep in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one issue worth mentioning. XL Fleet currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

There are key fundamentals of XL Fleet which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at XL Fleet, take a look at XL Fleet's company page on Simply Wall St. We've also put together a list of pertinent aspects you should further examine:

1. Historical Track Record: What has XL Fleet's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on XL Fleet's board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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